Hong Kong: Banks have resubmitted bids to provide a $3 billion to $4 billion offshore loan backing Bharti Airtel Ltd’s acquisition of South Africa’s MTN Group Ltd, banking sources said on Tuesday.
Mobile operator Bharti’s financing package additionally includes a local rupee-denominated loan of $1-2 billion equivalent which puts the overall financing at $4-6 billion, down from $5-6.5 billion previously discussed, several sources said.
The financing has been adjusted to reduce the amount sought from international banks in an offshore loan from the $4-5 billion discussed a month ago, and increase funds sought from local banks in a rupee loan from $1-1.5 billion.
Banks’ individual underwriting commitments on the offshore loan have been reduced to $500 million from $1 billion, the sources said.
More than ten banks submitted revised bids for Bharti’s offshore loan, including ANZ, Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, Calyon, DBS Bank, HSBC, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, the sources said.
Bharti was not immediately available for comment.
Many of these banks are also working on a $4.5 billion loan for merger partner MTN, which is expected to have dollar and rand tranches and has been increased from $3.5 billion, London-based banking sources told RLPC. Bharti is expected to compile a shortlist of around six banks in the next few days to lead its loan, although the deal structure remains fluid and the size of the loans and terms could still be revised, people familiar with the situation said.
Bharti is still targeting loan pricing of 350 basis points (bps) over Libor including fees for the five-year offshore loan, sources said, adding that banks would prefer to lend at plus-400 bps.
Lenders to the local $1-2 billion rupee-denominated loan are likely to include State Bank of India along with other local banks, the sources said.
Standard Chartered Bank is advising Bharti on the planned acquisition. Bank of America Merrill Lynch and Deutsche Bank are advising MTN.